Lender policy change costs broker

Lender policy change costs broker

Lender policy change costs broker One broker has a beef with a lender after a number of his mortgages were not honoured following a policy change.

“I had a self-directed mortgage account with the lender and I complied with all the rules and I started underwriting mortgages with my RRSP,” David Marco of Art Mortgage Camp told MortgageBrokerNews.ca. “They changed their rules and they originally grandfathered mortgages that were up for renewal but this year I had an interest-only mortgage up for renewal and I got a call telling me to either change the mortgage to a blended rate or move it to another lender.”

Marco elected to move the mortgage to another instruction so he could continue to offer mortgages through his self-directed RRSP. However, the original lender continues to refuse to waive the fee to close the account, according to Marco.

“I’m wondering if I’m the only one outraged and stuck paying these bills,” he said. “It’s possible it’s legal (for the lender to do this) but it is unfair.”

Self-directed RRSPs are becoming a dying breed, with all major banks having exited the space in late 2013. Currently, there are only a handful of lenders who will allow the practice to continue.

“People used to be able to use their RRSPs to fund mortgages – whatever kind of mortgage they wanted to fund,” David O’Gorman, president and principal broker of MortgageLand Inc. told MortgageBrokerNews.ca in October. “And now (they) can’t do that through the bank; there are only three companies that allow you to do it: Home Trust, Community Trust and Great Western.”
  • Amelia M 2014-06-10 9:35:14 PM
    Good to hear I only knew of Olympia Trust and B2B who did self directed still, so there are a few more I see but yes TDCT ws unfair to me in their policy as well. I feel no need to protect their name, it was dirty pool in my opinion.
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  • David Marco 2014-06-11 8:54:20 AM
    Actually it wasn't TDCT that but B2B. Their policy change cost me money and forced me to move some of my investments at my expense. I am looking at remedies. I set up a self directed plan with Canadian Western Trust and to date they have been amazing. You may want to check them out as well. Feel free to contact me directly to discuss your issues with TDCT. Thanks.
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  • Ron Butler 2014-06-11 2:44:41 PM
    We are doing $10 Million in private mortgages a year out of Scotia Trust Self Directed on behalf of our own money and our investors and so far zero problems. No third mortgages but we really don't ever do thirds so not an issue.
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